Netsol -- Overview

Netsol technologies is a new idea of mine that I am still researching, but in which I have built a small starter position (2%). Thanks to the Microcap-speculator for bringing it to my attention (see my recommended reading section). I have a call with the CEO tomorrow, at which point I hope to get more information, particularly around my primary concern (egregious management pay and options plan). Even with the shareholder rights issues, this appears like an interesting opportunity.

I will follow up with a more detailed, very in-depth posting, but let me provide a brief overview first. Netsol is a holding company with a majority interest in several operating subsidiaries. Most these subsidaries provide enterprise software and IT services worldwide, leveraging their cheap developers and IT staff in Pakistan. Many of their businesses are very high growth, with revenues for several operating subsidiaries growing at 100%+, and overall revenue growth for the company as a whole of around 50%. The stock is trading for 1x forward revenues and at about 15 forward P/E, but I view this as attractive mostly on the basis of 2 catalysts:
1) 300M Punjab land records contract, with an estimated PV of cashflows of around $32M, for which I believe the company is almost a lock to win. This contract is worth the entire market cap of the company.
2) Netsol-TiG, a highly profitable, high growth subsidiary that was set up to eventually manage a $50 million dollars in TiG's business. If all this revenue transfers over, it would generate about 12.5M in annual earnings for Netsol. Put a 15 P/E on that, and you have a business worth $187M (6x Netsol's current market cap)

My main issue is that management appears to be literally robbing the company, with salaries of $250k+ for top management (too much for a 30 million company), and humongous options packages that ensures management captures most the upside of the business, at the expense of the shareholders. I've been turning in my mind how to bring this up to management in the most effective way possible. Anyhow, should have an interesting call. Will update you all tomorrow.